AMD Ex-CEO Ruiz Named in Insider Trading Scandal

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In general, insider trading affects the investors who buy a particular company’s stock, not the consumers who buy its products – one reason that we’ve largely avoided covering the insider trading scandal that has netted a number of high-tech executives, including executives from IBM and Intel.

The Wall Street Journal’s latest report, however, names ex-AMD chief executive Hector Ruiz as one of the tipsters in the Galleon case. He is not a defendant, the paper reported. Ruiz, now chairman of GlobalFoundries (the spinoff of AMD’s manufacturing arm) served as AMD’s chief executive during the period of time covered by the investigation. According to the Journal and Bloomberg, Ruiz leaked the AMD manufacturing spinoff before the deal took place, but did not profit from the leak.

While being dragged into the Galleon scandal certainly doesn’t help
Ruiz’s reputation, it’s a little unclear how serious the leak actually
was. Quite frankly, Ruiz couldn’t keep his mouth shut about the “asset
smart” or “asset lite” spinoff plan, promising it would be AMD’s saving
grace. (If you slice AMD’s recent earnings the right way, though, he was right.) Heck, AMD’s chief marketing officer Nigel Dessau basically confirmed the plan two months before AMD even announced it. It wasn’t exactly a secret.

How the deal was structured, however, was. Knowing that information
might have allowed an investor to more accurately assess the deal. And,
of course, there’s the simple matter of allegedly violating SEC
regulations.

Overseeing quarter after quarter (seven total, I believe) of successive
losses should be a legacy that’s tarnished enough. Ruiz hasn’t yet
defended himself, so it’s entirely possible that a mistake has been
made, or Ruiz merely let slip something that he shouldn’t have. For
now, though, it’s a scarlet letter that Ruiz will have to wear, unless
vindicated.